SAMPLE EXAM QUESTIONS

 

The following test questions are from a Business Ethics class that is no longer taught at UTM, and are based on the book Business Ethics by Robert Hartley. These sample questions are made available here only as an example of how I construct tests. None of these specific questions will appear on any of my current tests, including those from the Philosophy 160 Ethics course.

 

(1) Which of the following is NOT part of the story of ITT's operations in Chile

a. ITT aided the CIA in attempting to stop Allende's election

b. Allende was eventually killed in a military overthrow

c. Chilean government nationalized all American companies in Chile, without financial compensation

d. ITT had a reputation for doing what was necessary to achieve profits

 

(2) "The efforts of an interest group to influence government in its behalf" is the definition of

a. socialism

b. economic imperialism

c. lobbying

d. supply side economics

 

(3) In the chapter on the Lockheed Corporation and overseas bribery, Hartley argues that overseas corporations can reduce the need for bribery by

a. imposing a U.S. moral standard on the overseas country

b. contribute to the campaigns of politicians in the overseas country

c. having both production and distribution facilities in the overseas country

d. paying protection money to the Mafia organizations in the overseas country

 

(4) The U.S. government bailed Lockheed out of its financial difficulties. According to Hartley, government bail outs present a dilemma between capitalist ideology and

a. the view that government should intervene as little as possible in the direction of economic affairs

b. the practical implications of job losses

c. Stalinist-type communist ideology

d. the laissez faire (hands off) approach to economics

 

(5) Which of the following is NOT part of the Nestles' infant formula story

a. poor parents would dilute the infant formula with contaminated water

b. consumer groups boycotted Nestle

c. Nestle shifts to selling infant formula in developing countries because sales drop in developed countries

d. all of the formula shipped to developing countries was old unused stock from developed countries which became contaminated in storage

 

(5) Which of the following is NOT one of Nestlesí marketing strategies of the infant formula

a. formulas came with savings stamp bonuses

b. use of milk nurses

c. promoted product to health care officials

d. free samples

 

(6) Which of the following is one of the demands made by the Infant Formula Action Coalition against Nestle

a. recall all contaminated samples of infant formula sold world-wide

b. stop distributing free samples in developing countries

c. stop all production of infant formula world-wide

d. stop all sales of infant formula in developing countries

 

(7) A missionary sales person (or detail person) is a sales person who

a. acquires details about the lives of every consumer who uses a given product

b. goes around leaving samples

c. sells a product as an act of charity, without any financial compensation

d. promotes a religious ideology when selling a product

 

(8) Which of the following is NOT part of Union Carbide's Bhopal catastrophe

a. the chemical released was an active ingredient in pesticides

b. toxic gasses were released from the plant at least in part because safety features had been shut off

c. the Indian government itself spent several million dollars in disaster relief programs for the victims

d. Union Carbide factories in India were completely owned by the U.S. parent company, with virtually no influence by local Indian managers

 

(9) Which of the following is NOT one of the consequences of the Bhopal catastrophe

a. Union Carbide did not have to pay money to the surviving victims

b. Union Carbide chairman was arrested upon his arrival in India

c. American lawyers tried to file claims on behalf of victims

d. Indian government arrested plant managers

 

(10) In determining who is responsible for worker competence in third world countries, Hartley notes two possible sources. One is that the company has a responsibility to train employees. Another possible source maintained by critics is that

a. a world organization such as the United Nations is responsible to assure that education world-wide is equitable

b. the U.S. government is responsible for funding the training a company's employees in third world countries

c. the worker him/herself has a responsibility to become properly educated

d. the foreign government has the responsibility to properly educate the workers

 

(11) In the chapter on Union Carbide, which of the following is one of the flawed incentives for building plants in less-developed countries

a. to benefit from less strict safety regulations

b. to set up in a location which is closer to already established points of sale

c. to set up in a location which is closer to raw materials

d. to expanding a business's global market

 

(12) In the chapter on assorted abusive business practices, the practice of secretly adding additional services for additional costs associated with

a. small loan companies

b. automobile repair companies

c. health clubs

d. small appliance repair companies

 

(13) Consider the following: a company sells a credit note to a third party whereby the original creditor has to pay the third party regardless of his satisfaction with the purchase. This circumstance is called

a. bait and switch

b. loss leader

c. holder in due course

d. packing

 

(14) Consider the following: a company gives a loan but sometimes adds on insurance without the customer knowing it. This practice is called

a. bait and switch

b. loss leader

c. holder in due course

d. packing

 

(15) According to Hartley, the Corvair flipped because

a. there was a design flaw with the stability of the wheels

b. they were all purchased by stunt men

c. the car would explode upon rear impact

d. only poor drivers operated Corvairs

 

(16) Which of the following was NOT one of the consequences of the Corvair controversy

a. increased governmental regulation

b. Nader jailed for slandering GM

c. Traffic Safety Act proposed by Johnson

d. decreased sales of the Corvair

 

(17) The issue of whistle blowing involves a conflict between

a. the rights of the stockholder vs. the rights of managers

b. the limited authority of middle managers vs. the broad authority of executive managers

c. marketing vs. public relations

d. loyalty to one's company vs. loyalty to the public

 

(18) According to Hartley, the last period of consumerism started in the mid 1960s, and was prompted by Nader's book Unsafe at Any Speed. Hartley argues that this period of consumerism

a. is still going on

b. was part of the communist conspiracy of the cold war

c. resulted in a decrease of governmental regulation

d. ended in the early 1970s

 

(19) Which of the following is NOT one the events in the Union Carbide assault on the Ohio Valley

a. increased governmental regulation (e.g. EPA)

b. Union Carbide laid off workers, claiming that was the only way they could comply

c. to this day, Union Carbide has not improved its pollution standards

d. pollution of the region resulted in respiratory diseases in the local population

 

(20) According to Hartley, we cannot apply a cost-benefit analysis to implementing pollution control measures since,

a. there is always a short term financial benefit to these measures, and factoring in this benefit would put that company in an unfair financial advantage

b. we cannot measure the benefit of a clean environment

c. accountants are not typically trained in assessing the costs of polution control devices

d. EPA regulations make such an analysis illegal

 

(21) In the story of General Dynamics overcharging the government for military contracts, Hartley discusses the issue of management change, and whether it can salvage a tainted corporate image. According to Hartley, the reception of General Dynamics's new chairman at a National press club luncheon shows that

a. the press have little effect on the image of a corporation

b. the press favorably accepts pronouncements of new ethical policies by new chairs

c. replacing an old chairman is the only thing which will appease the press

d. the press will remain skeptical about announced changes in ethical policy

 

(22) In the chapter on the Alaskan Oil Spill, which of the following is NOT one of the reasons cited by Hartley for why the oil spill happened

a. a budget radar unit was installed

b. it happened during a time of heavy deregulation by the Reagan administration

c. a heavier grade of oil was being transported

d. over the past few decades, there was a general complacency (or agreeability) on the part of the oil companies and local government

 

(23) According to Hartley, a corporation is morally (as opposed to legally) responsible for an accident

a. if the courts determine that a corporation must pay fines or some kind of accident compensation

b. if the C.E.O or another high level official in the corporation gets fired as a result

c. if most people would put the blame on that corporation

d. if it was careless, negligent, or used bad judgment

 

(24) According to Hartley, what is the dilemma with using double hulled tankers

a. once on the open seas, the tanker can remove the second hull, and thus defeat its purpose

b. once oil is put into double hulled tankers, it can never be taken out until the vessel is dismantled

c. double hulled tankers are more safe, but hold less oil and thus require more sea traffic

d. double hulled tankers are less likely to be punctured, but are heavier and more likely to sink

 

(25) In his analysis of the savings and loan disaster, Hartley argues that

a. the lending policies of S&Ls during that period was actually conservative; the overall bad economy of the early 80s is why they failed

b. the S&Ls were run out of business by the banking industry, which perceived the S&Ls as a threat

c. S&Ls could have used more traditional lending strategies and still been successful

d. S&Ls would have gone out of business much sooner if they didn't gamble on nontraditional loans

 

(26) In the chapter on the savings and loan disaster, Hartley discusses the notion of a corporate mission statement. Which of the following is NOT part of the nature of a mission statement

a. should not be to narrow

b. should not be too broad

c. it determines what business a firm should be in at a given time

d. should be as all encompassing as possible to allow for any and all business opportunities

 

(27) In the chapter on corporate raiders, the notion of synergy is defined as

a. the creation of a whole that is greater than the sum of its parts

b. the creation of a whole becomes less than the sum of its parts

c. synthetically produced electricity from petroleum based products

d. the gap between the total assets of a company and its market value

 

(28) In the chapter on corporate raiders, Hartley discusses the notion of the transferability of management skills. He concludes that

a. management skills are indeed transferrable from one industry to another

b. no management skills are transferable from one industry to another

c. there is no such thing as a management skill: it is all a matter of luck

d. Campeau's story suggests that there are limits to the transferability of management skills from one industry to another

 

(29) According to Hartley, the Corvair flipped because

a. there was a design flaw with the stability of the wheels

b. they were all purchased by stunt men

c. the car would explode upon rear impact

d. only poor drivers operated Corvairs

 

(30) Which of the following was NOT one of the consequences of the Corvair controversy

a. increased governmental regulation

b. Nader jailed for slandering GM

c. Traffic Safety Act proposed by Johnson

d. decreased sales of the Corvair

 

(31) The issue of whistle blowing involves a conflict between

a. the rights of the stockholder vs. the rights of managers

b. the limited authority of middle managers vs. the broad authority of executive managers

c. marketing vs. public relations

d. loyalty to one's company vs. loyalty to the public

 

(32) According to Hartley, the last period of consumerism started in the mid 1960s, and was prompted by Nader's book Unsafe at Any Speed. Hartley argues that this period of consumerism

a. is still going on

b. was part of the communist conspiracy of the cold war

c. resulted in a decrease of governmental regulation

d. ended in the early 1970s

 

(33) Which of the following is NOT part of the STP story

a. Consumer Reports article attacked the claims of STP

b. the STP logo was a key part of its advertising strategy

c. STP was required to perform corrective advertising

d. STP contains an acid which over time dissolves engine parts

 

(34) A "membership group" is a group that a consumer

a. actually belongs to

b. must pay fees to in order to join

c. is nominated into by someone in a reference group

d. admires or identifies with

 

(35) Which of the following is NOT part of the electrical equipment price fixing conspiracy

a. smaller electrical companies were not allowed to participate in the conspiracy

b. the convicted conspirators were middle management level

c. the incentive behind the conspiracy was to increase profits after WWII restrictions

d. it involved electrical equipment

 

(36) Price fixing is a violation of what kind of laws

a. anti-discrimination laws

b. laws against insider trading

c. fairness in advertising laws

d. anti-trust laws

 

(37) In the story of General Dynamics overcharging the government for military contracts, Hartley discusses the issue of management change, and whether it can salvage a tainted corporate image. According to Hartley, the reception of General Dynamics's new chairman at a National press club luncheon shows that

a. the press have little effect on the image of a corporation

b. the press favorably accepts pronouncements of new ethical policies by new chairs

c. replacing an old chairman is the only thing which will appease the press

d. the press will remain skeptical about announced changes in ethical policy

 

(38) Which of the following is NOT part of the story of the Dalkon Shield

a. by the early 80s, more than 4,000 law suits against A.H. Robins were still pending

b. A.H. Robins filed for bankruptcy in the mid 80s in an attempt to block further suits

c. once A.H. Robins was sold, no more financial compensation was given to those who filed suits

d. it was invented by a professor of gynecology at Johns Hopkins University

 

(39) In the Dalkon Shield chapter, Hartley considers when a company is morally responsible for the long term negative effects of a product. He concludes that

a. a firm is not morally responsible for a harmful product when they do thorough testing and there are no signs that a product is dangerous

b. all moral responsibility rests with thegovernment which establishes safety regulations

c. all moral responsibility rests with the consumer who is responsible for investigating a product's safety him/herself

d. a firm is morally responsible for a harmful product even if they did thorough testing and there were no signs that a product was dangerous

 

(40) Which of the following is NOT part of the Beech-Nut adulterated apple juice story

a. at one point, beet juice was the key sweetening ingredient used in the apple juice concentrate

b. Beech Nut delayed in recalling the product in an attempt to use up several million dollars of inventory

c. Beech Nut itself manufactured the artificial apple juice concentrate which it used in its apple juice for babies

d. in its defense, Beech-Nut maintained that there wasn't positive proof that the concentrate was adulterated

 

(41) In the Beech-Nut chapter, Hartley discusses three possible options open to middle managers who recognize that their company is engaged in immoral activity. Which of the following is NOT one of those options

a. resign

b. be a whistleblower

c. accept the situation

d. stage a labor union walk out

 

(42) Critics maintain that current punishment for white collar crime is not strict enough since

a. the leniency given to white collar criminals is based on class prejudice

b. because of benefits packages, punishment for white collar crime becomes a paid vacation for the criminal

c. white collar jobs come with more responsibility and thus require greater accountability

d. white collar criminals are also the ones who commit violent crimes, such as rape and murder

 

(43) A classic defense of questionable conduct is that "the ends justify the means." In the chapter on Beech-Nut, Hartley rejects this defense since

a. no one's ultimate ends (or goals) can be clearly articulated

b. there is always a moral course of action which will yield precisely the same end

c. sometimes the means justifies the ends

d. it will always involve a compromise of moral principles

 

(44) In the chapter on pharmaceutical companies, which of the following was Burroughs's justification for pricing AZT so high?

a. since the AIDS patients would die soon in any case, it didn't matter if they drained their bank accounts

b. several Burroughs workers contracted AIDS in the testing process, and thus created more overhead

c. it was initially for a restricted market

d. the government intended to purchase the drug for AIDS patients from a public fund

 

(45) In the chapter on pharmaceutical companies, Hartley discusses the policy of subsidizing poor selling drugs with high profits from well selling drugs. He concludes from this discussion that

a. this form of subsidizing should always be done

b. the critical issue is determining how high the successful drug's profit margin should be

c. the government should pay for drugs which are not economically viable

d. this form of subsidizing should never be done

 

(46) In the chapter on pharmaceutical companies, Hartley discusses the notion of transfer pricing. Which of the following is an example of transfer pricing?

a. selling a product to a charitable organization at a reduced rate

b. selling a product to one of its overseas subsidiaries which will then resell it at a tax savings

c. changing the price of a product so that it is the same as a competing product

d. increasing the sticker price on an item to take into account inflation while the product is on the shelf

 

(47) In the chapter on silicone breast implants, Hartley argues that one of the primary immoral things done by Dow Corning was to

a. make the implants smaller than their clients actually wanted

b. use a thinner plastic sack to hold the silicone which saved money

c. suppress incriminating documents

d. consciously use an impure but cheaper grade of silicone in the implants

 

(48) Hartley discusses whether product law suits against companies are getting out of hand. Defenders of such suits argue that

a. law suits can be a strong deterrent to corporate recklessness

b. given the overabundance of lawyers in this country, such law suits are the only way that some lawyers can make a living

c. all of the money won in a law suit is taxable, thus society as a whole benefits

d. if they don't sue, someone else will

 

(49) Which of the following is NOT a typical example of governmental paternalism

a. prohibiting dangerous sports

b. motorcycle helmet regulations

c. allowing people to go bankrupt

d. requiring seat belts

 

(50) In the Chapter on Powermaster Beer, which of the following is NOT one of the key moral issues discussed by Hartley

a. whether the name "Powermaster Beer" is offensive and unethical

b. whether drinking is unethical

c. whether the target marketing technique of Powermaster Beer is unethical

d. whether it is unethical to sell strong beer